Subsidiaries of a Dutch oilfield services company (the "parent company") settled potential civil liability with OFAC for apparent violations of Ukraine-related and Sudanese sanctions regulations.

In the first enforcement action, OFAC found that four U.S. senior managers of an oil and gas supplier (or "first subsidiary") approved five contracts for its own foreign subsidiary to supply Gazprom Neft Shelf and its Arctic offshore oil-producing projects. Gazprom Neft Shelf, as a wholly owned subsidiary of the sanctioned OJSC Gazprom Neft, is subject to Directive 4 restrictions under Executive Order 13662 ("Blocking Property of Additional Persons Contributing to the Situation in Ukraine"), as implemented by section 589.201 ("Prohibited transactions") of the Ukraine-Related Sanctions Regulations. OFAC claimed that the managers knew that the contracts would support Gazprom Neft Shelf, as the requests for approval and the Pre-Purchase Forms referenced such activities and acknowledged the Russian Arctic as the ultimate destination of the oil-related goods.

OFAC found that when the parent company acquired the first subsidiary, the parent company discovered the apparent violations of Directive 4, and the first subsidiary submitted notification to OFAC. OFAC determined that the first subsidiary's submission did not constitute a voluntary self-disclosure. (OFAC did not explain why the submission did not qualify for voluntary self-disclosure credit.) OFAC also determined that the first subsidiary's conduct was non-egregious. To settle the charges, the first subsidiary agreed to pay a $1,423,766 civil monetary penalty.

In the second enforcement action, OFAC found that employees of a Texas-based subsidiary (or "second subsidiary") of the parent company facilitated one shipment of oilfield equipment to a Sudanese customer. OFAC explained that the shipment originated from a Canadian subsidiary of the parent company and went to a Chinese joint venture, in which the parent company held a 50 percent interest, before delivery to the Sudanese customer. OFAC claimed that the employees knew the goods were destined for Sudan based on email communications, and that the employees were made aware through the second subsidiary's internal policies that U.S. sanctions prohibited such trade activities with Sudan. OFAC determined that the second subsidiary violated section 538.206 ("Prohibited Facilitations") of the Sudanese Sanctions Regulations, which were in effect at the time of the described misconduct. OFAC determined that the conduct was non-egregious and not voluntarily disclosed. To settle the charges, the second subsidiary agreed to pay a $160,000 civil monetary penalty.

Primary Sources

  1. OFAC Recent Actions: Settlement Agreements between the U.S. Department of the Treasury's Office of Foreign Assets Control and Cameron International Corporation and Schlumberger Rod Lift, Inc.
  2. OFAC Enforcement: OFAC Settles with Cameron International Corporation for Its Potential Civil Liability for Apparent Violations of Ukraine-Related Sanctions Regulations
  3. OFAC Enforcement: OFAC Settles with Schlumberger Rod Lift, Inc. for Its Potential Civil Liability for an Apparent Violation of the Sudanese Sanctions Regulations

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